Peter King: Welcome to the PK Experience. I have a very special treat for you today, this is a call that I did with Ryan D. Lee, who is a financial advisor. I have to tell you, this particular podcast gets me excited like few others have so far, which is quite ironic because we talk about life insurance and what worse thing can you get excited about, quite honestly. But Ryan talks about life insurance in a way that is so revolutionary, if you haven't heard of the strategy that he's going to be walking you through, and not only that but he really touches on why this vehicle, this financial vehicle, is something that will help you live the life, legitimately live the life, that you aspire to, the dream life that you have in your head is something that you can really make happen with this financial vehicle. So I'm going to let us just dive into it right here. This is a great call, listen all the way through, take notes. If you're like me when I went back and relisten to it, I had to rewind and write some notes down again to make sure I understand it, but it is well, well worth it. Ryan is an excellent educator, he takes these very complex ideas and makes them very, very simple and easy to understand. I can't highly recommend this enough. So with that, let's dive into the call.
Okay, we are live. Thank you for joining us. We have on today's show, Ryan D. Lee. The D is very important, I take it. Ryan Lee. Today we're going to be talking about Infinite Banking.
I came across Ryan and was blown away really with not only this particular strategy that we're going to dive into in this call, but also his passion and the purpose behind it and how he's actually living it. It's really nice to get financial input from somebody that is living the lifestyle that you aspire to to, I'm speaking for myself in that regard. Too often I think a lot of people speak to financial advisors that are hourly employees, and nothing wrong with that, but that may not be the path and they may not have the similar mindset to get me to where I want to go. So I think a lot of the listeners want to know how do I break out of that rat race, what are the different tactics that we can use to achieve financial freedom and whatever that means, and however that listener define for themself. But first and foremost, Ryan, thank you for joining us today.

Ryan Lee: Hey. So thanks so much, Peter. It's exciting to be here. What you talk about and what you believe in resonates so much with me, just me and around ... Out in the country there's such a need for that type of advice out there.

Peter King: There really is. It's a wonderful time to be alive, learning this stuff is just something you don't get in traditional education and it takes folks like you to really dive in and understand the nuts and bolts to then have the ability to describe it and illustrate it and help people see it and understand it.
So what we're talking about today is a concept called Infinite Banking, can you give us just a broad elevator speech on what is Infinite Banking and how that why the average person should know about it?

Ryan Lee: Yeah. That's a fantastic thing, man. I'll tell you what, when I learned about Infinite Banking it was really funny, I was actually getting my masters degree at the time and I thought I was the king of finance and I knew everything that there was about personal finance, but when I was introduced to this simple yet eloquent concept, my jaw literally dropped to the ground because it was something I had never heard of to that point. When I was introduced to it and then I ultimately started using it, it changed everything for me financially.
So basically what is, it's using very uniquely designed life insurance policies that act and function as your own personal bank. Now, that might be an over simplification of it, but it's a way to save and grow wealth today that you're in control of, that's not correlated to the stock market, but have a very unique ability to actually leverage your wealth, leverage the value of your savings, to achieve both long-term goals of having your money compound but also short-term goals, and we'll talk a lot about that today. But the reason people call it Infinite Banking is once you understand the principles of using a life insurance policy like a bank, the possibilities of what you can do with it are literally infinite.

Peter King: It's absolutely fascinating. There was literally an elderly woman who was in tears because she, for her whole life, had been saving the traditional way and when she finally understood the concept that Ryan's going to be talking about today, it opened her eyes and her mind to what was possible. Obviously, it's never too young to start on this, but it really does have the impact that you're talking about where people, their jaws drop open because they don't believe that it's possible.
So if you just heard Ryan talk and you heard life insurance and you heard savings, and your mind started to tune that out ... I mean, literally, myself, when I hear that I almost have a conditioned response like, I don't even want to hear what you have to say, and yet because I know about this ... If you're listening to this right now, stay attention to what we're talking about because you're going to hear terms like life insurance, you're going to hear financial related terminology, but if you understand what's underneath that, we're talking about, frankly, sounding a little bit cliché and corny, creating your dreams. This is a strategy and a method to make that happen.
So let's go just the next level a little bit deeper, so this is a "Infinite Banking strategy" where we take a life insurance policy, and walk us through the fundamentals of how you set it up.

Ryan Lee: Yeah. So here's the cool thing, man, and Peter, I want to hit this really quick right at the beginning, if we really look at the value of money, if anyone who's listening to this podcast right now, if you have a $20 bill or a $1 bill of any denomination, take it out of your pocket and look at that piece of paper and ask yourself is that wealth? It really isn't. It's just a piece of paper, which ultimately means it's a tool that can be used to what you said Peter, create the life that you love, not when you're 65, but today. At the end of the day that's really what we all want, we want the peace of mind and the security that comes from keeping our money and then having our money be used as a tool to create life experiences that we love and want.
So the reason Infinite Banking, the reason life insurance can be a solution for that, is you can actually structure a life insurance policy that fits within the tax code. So if we look how the tax code is structured, and don't go to sleep on this one either, but if you look at how the tax code's structured, it will tell you what to do if you want to keep more of your money, and if you have a life insurance policy all of the growth that you can receive in these policies can ultimately be tax-free forever. So all we do is we structure these policies that fit in the tax-free bucket, kind of like a Roth IRA [inaudible 00:07:23], I'm sure people are familiar with those type of tools, and all we do is we say, "okay, look, how much money are you going to put in Mr. and Mrs. clients", and that's unique for every single person. Once we understand how much money is going to go into one of these contracts, then we simply buy the least amount of life insurance required by the IRS to fit in the tax-free bucket and then everything else that you put into the policy really is just like savings in a Roth account, or savings in a mutual fund, or savings in real estate. It's the investment portion of a policy. So from a structure standpoint, that's how it is

Peter King: Can I interrupt you really quickly? I want to make it clear when Ryan is talking about the least amount of life insurance, one of the keys to this that was helpful for me to better understand this is, you're using ... Most people think about life insurance policy for the death benefit, we think of the life insurance policy as a payout after we pass to our loved ones as beneficiaries, what we're talking about, what's Ryan is talking about, is using a life insurance policy as a tool to reap benefit while you're still alive. So when he's talking about getting the lowest amount of life insurance, it's basically saying we're going to buy this policy but at the most cost-effective way so that we can utilize the structure and the tool.

Ryan Lee: Yeah. That's a fantastic clarification, Peter. Very, very, very important.

Peter King: I'll be honest, this has been a concept that's been very fascinating to me and I have delved into it. Actually, I set up a policy and I've even borrowed against it, etc., but I'm still a little bit fuzzy on the math on it. Can you walk us through just a basic example so that somebody can understand ... Let's say I have 10 grand, how would I apply it towards this strategy?

Ryan Lee: Okay. This is a great concept, and we're going to give people, I think, access to actually watch a video that has all of these numbers, but I'm going to explain it to you very basic.
When you set up these policies, we set it up in such a way ... So everyone that we work with, we help them train their minds on how to make financial decisions, and the very first thing that we have to use instead of our financial planning is putting the individual in control. The sad part about financial investing and financial planning today is the individual is never in control, which ultimately what that means is they have their eyes closed, their fingers crossed, and they hope that somehow the market takes care of them, that taxes stay low, that their financial advisor has their best interest in mind, but at the end of the day their plan is built on hope, not strategy. And the closer they get to retirement or wanting access to their savings, the more anxiety ultimately fills that individual, because they never really know what the outcome of their savings will ultimately be.
So the first principle is when we use life insurance, one of the reasons that we're using life insurance is it will put you 100% in the driver's seat and be in control. You'll know exactly what you have, you'll know exactly how it works and you'll know exactly how you can utilize it.
One of these aspects and benefits of these policies is, Peter, if you put in $10,000 into a policy, that money is 100% liquid and available to you. Now, what this means, you have a unique relationship with the insurance company and they will allow you to take what's called a policy loan. Now, you mentioned borrowing against the policy, that's really all it is. The insurance companies, they actually have to have millions of dollars liquid, meaning if we all came to the insurance company at the same time and said, hey, guess what, I want my money back, they would have to be able to produce it for us. Whereas if we go to a bank, we all know, we put our money in the bank and the banks go out and use it to run their business, and if we all came and asked for our money at the same time it's not there. Insurance companies are different, so they have our money, they have our money invested in short-term investments, and when we take a policy loan, the insurance company actually lends us the money. They don't take the money out of our policy, they lend the money from their stores, from their reserve capital, and they charge us an interest rate.
Now, here's the best part about it, the interest rate that they charge us is a simple interest rate type of loan, but you're in the driver's seat so the insurance company will never ask you why you're taking a loan, what you're doing with it, how you're going to pay it back, if you're going to pay it back, you get to control all of that. As you pay back the policy loan, the cost of the loan goes down. So it works just like a mortgage, every time you make a payment on your mortgage, a little bit more of your payment goes to principal, a little bit less goes to interest, and over a long period of time the cost of the loan goes down. Policy loan is the same thing, every payment you make, the cost of the loan goes down.
So the question would be, why would I ever pay an insurance company to essentially borrow my own money? We get access to borrow the money and use it for whatever our short-term goals are, and we'll talk more about that, but on the other side of the equation, the money never came out of our policy, meaning that the money continues to compound year over year over year. So as your cost goes down with a policy loan, the profit from your compounding in the policy goes up and you have a completely inverse relationship, meaning you get to use the value of your money today to accomplish whatever your short-term goals are but still have your money compounding and growing.

Peter King: Just hearing you say that again, the jaws continue to drop. This is where I think it really becomes a game changer for people. I want to take a quick step back so people understand, because when they hear this and they think of the financial benefit, this is where the, "oh, it must be too good to be true," or, "what am I missing? Is it a scam? What is this?" Can you just give us a brief history of where this concept came from and how long it's been in place and that it's totally above board and IRS accredited, etc?

Ryan Lee: Yeah. So here's the cool thing, the insurance companies that actually run these type of policies, they've been in business for hundreds, and I'll repeat that, hundreds of years, meaning that this concept, this strategy and these type of policies have been in existence before the Federal Reserve, before the stock market, before the tax code as it exists today. I mean, these insurance companies are literally the backbone of the economy in the US, so they're some of the most ... I mean, everyone's heard of New York Life, you can set up one of these policies with an insurance company that has the brand and the name recognition and the history of New York Life, and they'll put that all on the table and say, okay, hey, New York Life is standing behind this contract that we're just setting up for you right now. So that's the first thing.
The second thing about this is insurance as it exists today, most people think of, and we'll just do a quick tour through time, most people, before the industrial revolution, most people saved in a way that is completely different from how people save today, most people consider saving today putting it in the stock market, and you're not really saving money that way. You're investing it, meaning you're putting your money at risk, and it might be there and it might not, but you take all of the risk of that happening. Anyone who went through 2008 remembers what it feels like, the punch in the gut that it feels like to lose your money in an investment and have all of a sudden your dreams of retirement or whatever you were saving for, or investing for, change right before your eyes.
Insurance companies don't invest that way. Insurance companies only invest in things that they can control, meaning they come to the table and say okay, "Mr. and Mrs. Client, because we control our investments through our business and through cash flowing investments, we can actually give you a guaranteed rate of return." So inside of your policy, New York Life will come to the table and say "We're going to put 180, your track record, on the table and write a contract with you," meaning the money in your policy has a guaranteed rate of return for the rest of your life. "On top of that, we'll also allow you to participate in our profitability because New York Life" ... Go to the stock exchange right now and try to buy a stock in Mew York Life, you can't do it. New York Life is not a publicly traded company. They are actually owned, believe it or not, by their policyholders, meaning the people who have these type of policies own New York Life and the more profitable they are, the more profitable the owners, i.e. the policyholders, are because the insurance company, above their guaranteed rate of return, gives the dividends, and they've done it every single year they've been in business, back to their policy holders.
So it kind of shifts the whole fundamentals, you're not investing, hoping for a positive outcome but not having any control, you're saving in a way what that's predictable and 100% inside of your control.

Peter King: Okay, so let's pick it up from where we left off with the $10,000, let's say a young couple has a 10 grand, or anybody for that matter, takes the 10 grand, they go ... What type of policy are they looking? Let's get to the granular level a little bit, what should they be asking for? What are they looking for? What type of policy?

Ryan Lee: Okay, so going back to that idea of you being in control, that's the foundation of everything we do, we want you to know exactly what you have and be in control of your financial future, so we recommend whole life insurance policies. The reason for that, there is zero variability, there is zero ambiguity, you know exactly what you have and exactly how the policy works. So the whole life policy built as you mentioned, to minimize the cost of insurance and maximize the cash of the policy.

Peter King: Okay, so does any insurance provider have whole life policies, or are you looking for a specific provider?

Ryan Lee: That's another good distinguishing factor. So there's about 300 insurance companies that are in business today, somewhere in that neighborhood, it might be a little bit more than that, but about 300 companies. Out of those companies there's only a very small handful of companies that are actually called mutual companies, meaning they're not publicly traded, they're owned by their policyholders. If you think about a public company, a company whose public has shareholders, meaning ... If you take someone like Transamerica, or companies that are publicly traded, I can actually come in and buy stock in Transamerica. Now Transamerica has to make decisions, not just for their policyholders, but for their stockholders, and they have to level up to quarterly profitability reports and make decisions that might not be as long-term oriented as other companies. So we recommend mutual insurance companies like New York Life, like Penn Mutual, like MassMutual, companies that are not publicly traded, and then we recommend whole life policies built to go right up to that IRS line to buy just enough life insurance to keep it qualified as a life insurance policy and maximize the cash value of the policies. So whole life, mutual life insurance companies.

Peter King: Okay, and then to go even another layer deeper, are all whole life policies created equal?

Ryan Lee: Good question. So two aspects to that, most people, and you mentioned traditional financial advice, most people who use life insurance, they don't use it in the way that we're talking about snow. No, if they do, they might know roughly how to structure a policy the right way, they might understand how to fit it within the tax code and all of that, but what we recommend is if you want to use a policy in the way that we're talking about you need to work with an advisor that does this as their primary focus and emphasis. It's a whole different brand of thinking, it's a whole different philosophy and strategy around building wealth and living life.
So you can go to Infinite Banking, Nelson Nash, there's groups there ... We're Atlas Wealth Solutions, there's Integral Financial, there are several groups that specialize in this concept, and I would recommend working with a group like that that knows exactly how to use these policies and how to structure them to meet the client's best interests.

Peter King: You mentioned Nelson Nash, I just want to make a little quick footnote, Nelson was the man that kind of came up with this strategy, was he not?

Ryan Lee: Yeah.

Peter King: Okay. He wrote ... What's the name of the book again? Becoming Your Own Banker?

Ryan Lee: Becoming Your Own Banker. Yeah, he's the Godfather of this whole thing. It's crazy, his story is really, really unique and interesting, how he discovered it and how he started structuring policies in this way, but he's really kind of the Godfather of, or that's what I call him, the Godfather of setting up policies maximum funded to fit within the life insurance criteria and then taking that strategy to the masses. He was really the one that was really the driving force behind that in the beginning.

Peter King: He was alive hundreds of years ago, this was right-

Ryan Lee: No, no. So, Nelson, he's still alive right now, he's an older dude, he's in his mid-80s, early 90s.

Peter King: He is still around? Okay.

Ryan Lee: Yeah, he's still around. He's written a book, you can get it ... I'm pretty sure you can get it free, Becoming Your Own Banker, but there are several groups out there, Kim Butler, there's groups out there that promote this type of strategy as well.

Peter King: But the strategy is hundreds of years old. People have been using this strategy for a long time, correct?

Ryan Lee: Yeah. So here's the crazy thing, man, I mean if you think about what the wealthy do ... Do we ever think that the wealthy ... Are they just investing in mutual funds better than the average person? They're not. They do the exact opposite. It's not like Warren Buffett has a corner on the mutual fund industry, he doesn't. Warren Buffet buys controlling interests in companies and his investment is either in real estate or in companies, and hi whole goal is to protect the money that he has.
I mean, we can go through the history and we can go from Walt Disney, we were just talking about Disney cruises with our kids, Walt Disney, the original creator of Disneyland, you know how he did that? He did it by taking a policy loan on a life insurance policy that he had. If you go back and watch the movie It's A Wonderful Life, in It's A Wonderful Life they actually make a reference that ... What's the guy's name? George, I think. I can't remember exactly what the ... It's been a while since I watched the movie, but he [crosstalk 00:21:01]. I mean, he was saving a life insurance and he took a policy loan to cover a short-term debt and an obligation that he had, so it's been around for a long time. It hasn't been as, really, as marketable as Nelson Nash made it. Nelson Nash really put the infrastructure and the strategy and the philosophy behind it, but it's [crosstalk 00:21:20] for hundreds of years.

Peter King: Got it. I love that fact about Disney because when you guys mentioned that on your talk the other today, that was fascinating. It's fascinating to know that's how he used that to grow Disney.

Ryan Lee: No, the banks wouldn't loan him money so he just took it out of his life insurance policy and said, look, I'm going to [crosstalk 00:21:37].

Peter King: Didn't he get turn down by multiple banks?

Ryan Lee: Multiple banks. He started Disneyland with life insurance policy loan.

Peter King: Wow. That's so cool. We would not have Disney if it wasn't for Infinite Banking, how about that?

Ryan Lee: My kids would be different people without it.

Peter King: Right. Very cool. Okay, so back to our example, you have $10,000, so we know kind of what type of policy to look for, it's a whole life policy, you mentioned the different advisors that are out there, can you give us an indication as to what makes a good advisor and what to maybe stay away from, and specifically like fees? How much money-

Ryan Lee: Yeah, good question-

Peter King: Because I've spoken to a few and they're very different and I was with one for a little while and I went down the path and then I found out what their cost structure was, and it was ... I thought I was investing that money, and I was, it's just I was investing in them, I wasn't investing in my policy.

Ryan Lee: We have a term for this in Atlas Wealth Solutions, and this is our term, we call traditional advising, goldfish advice. It came from an analogy ... Imagine three goldfish swimming in a goldfish bowl, two of the goldfish are fairly new goldfish to the bone, and one, he's the old guy, he's been in the goldfish bowl for a long time. As the two younger goldfish swim by the older goldfish, the older goldfish ... Or the two younger goldfish ... Let's see, I'm getting my story wrong. The older goldfish turns to the two younger and he says, "okay, hey, morning boys, how's the water?" The two younger goldfish get a puzzled look on their face and they swim on and then they turnaround and they say, "What the hell is water?" The two younger goldfish, obviously, they didn't know that they were even in a goldfish bowl, they didn't know they were swimming in water, they didn't know what they didn't know.
I'll tell you what, most of the financial advice across the entire board that anyone has ever given doesn't come from a financial advisor, it comes from a salesman, and the salesman is paid a commission and a fee to sell a product, and they sell the product that they're told to sell or the one that pays them the highest commission. I mean, that's all it is. So for most financial strategy, and the crazy part about this, my business partner actually came from this world where he worked in a call center and gave financial advice to people based off a sales sheet. He found out how old they were, what they had to invest and then he sold them a list of products on a menu that was placed in front of them, and that menu would change based on the fees and the commissions that they were able to charge. Life insurance is no different than that, people can say all the right things but then sell you something completely different.
So what we teach people is you need to know two things, and this is the simplest way to do it, you need to know how much money you want to put into a policy, if it's $10,000 or $100,000, or any number, you need to know how much you want to put in.
The next thing you need to know is what is the IRS limit. What's the least amount of life insurance for that amount of money you're putting and the most amount of cash value? In every policy we set up we actually show our clients, "okay Mr. Client, you want to put in $10,000. here's the IRS limit, you can see your policy was set up right to the $10,000 limit, which means the least amount of cost is built into your policy." We're just buying enough life insurance for you to put in $10,000. That's it. So it can be very visible, most financial advisors will never share that because the more life insurance they sell you, guess what, the more they make.

Peter King: So as an advisor of this type of strategy, you're making your money on the policy that you sell?

Ryan Lee: Bingo. 100% of life insurance advisors make their money from the life insurance company based on the amount of life insurance they sell.

Peter King: But that would be the traditional type of death-benefit style life insurance? You're talking about an alive benefit life insurance, so as you as the advisor you're still getting paid on the policy that you're selling?

Ryan Lee: Yeah. So you get paid based on the structure of the policy, but this is where I can come to you and I could say, "okay, hey Peter, yes you want all of these great benefits, but you know what, we really need to buy a bigger death benefit." What happens if this, what happens if that, and I can sell you a policy that has very little to do with what you actually wanted but because I'm a good salesman, I can convince you to buy something different and say, "one day when you're this age, then we can access the policy." That's, honestly, how most of this stuff is sold. It's sold as a product that will serve a future need, which is all financial planning, put your money in here, don't think about it, close your eyes, cross your fingers and hope maybe it's going to work out.
Now, life insurance can be sold the exact same way. So when you come to us, we just simply say, and then you can do this with any financial advisor if they know what they're doing and they're willing to share it, "Hey, Mr. and Mrs. Advisor, I want to put this much money in, what's the least amount of life insurance I have to own in order for this contract to work?" Then I come to the table and I say, "okay, yes, this is the policy that we're going to build, you can see it structured right up to that limit so you know your costs are absolutely as low as they have to be for you to get what you want."

Peter King: So the skeptics out there will say that seems like a little bit of a conflict of interest for you selling a product that in my best interest, as the buyer, benefits me to have the smallest amount possible, the smallest coverage possible, or I don't know if I'm saying that correctly-

Ryan Lee: You're saying it right, yeah.

Peter King: Okay. So that's a little bit of a conflict of interest if you're making money on that, is there another way, is there another fee that you guys make? Is there a per transaction? Because I think one of the advisors I spoke to added a point onto however much I was investing, and that that ultimately was their fee. So, are there any other areas that the average person should be looking at to where they might be paying an advisor a fee?

Ryan Lee: Yeah. That's a great question. So it depends on the type of policy, if you're setting up policies that are correlated to the stock market, they're called universal life policies, there can be additional charges and surplus charges on indexing you or tying you to the stock market. The reason we use whole life is it's cut and dry, it's plain and simple, it's black and white, "This is what your cost is, we're buying the least amount of life insurance and there is zero ambiguity on top of that."

Peter King: Okay, so is there a requirement to continue to fund the policy? If you have $10,000 and you had that aside and you want to put that into a policy, do you have to continue to put money in the policy or can you just drop the 10 grand and be done?

Ryan Lee: Yes, that's a great question. So every policy is designed unique to the individual, and in some cases, yeah, you just put money in one time and you never put money in ever again.
Another thing that we look for with these insurance companies, going back to that number one principle of keeping the client in control, we want to work with companies that are going to give the client unlimited flexibility in between. Maybe they don't put in $10,000, maybe they need to put in less than that, so we want to give them flexibility within their policy, and then we also want to give them flexibility to fund their policy as long or as little as they want. So we use companies that give an unlimited exit strategy. If you put in $10,000 today and you're done, you're done. We close the contract, no more money required after that. If you put in $10,000 this year, and five next year and 10 in year three, we build the flexibility in there so you have the ability to do that. So yes, to your point, Peter, you can build policies that you fund only one time and you never put any more money into, or you fund over a long period of time. My first policy I set up 10 years ago, and I've been putting money into now for 10 years.

Peter King: You mentioned a contract, so if you set up a contract where you're putting in $500 a month, are you obligated to do that? What happens if you don't? [crosstalk 00:29:07] the contract is.

Ryan Lee: So think about your policy kind of like a bucket, and going back to that first principle, how much money are you going to put in, if your goal is to put in $500 a month, your bucket needs to be built so you can have the ability to put in a maximum of $500 a month, only enough life insurance is purchased for you to hit the goal that you have.
Now, if you get into a year that you can't or don't want to pay the full amount, in these contracts there's a minimum amount you have to pay as long as you want to put money in, and there's a maximum amount that you can put in as long as you want to put money in. The maximum is your savings goal, the minimum amount, it's called the base premium, and that base premium is the amount of money that you're contracting with the insurance company that as long as you want to put money in you'll at least put that minimum amount in. The best way to think about, it's about 25/75 ratio. So if you're going to put in $10,000, your maximum amounts 10, your minimum amount is going to be about $2,500 a year, give or take, if that's the number.

Peter King: Okay. And then worst-case scenario, for some reason somebody's not able to pay the minimum, what happens?

Ryan Lee: Two things, worst-case scenario, if it's a short-term thing you can actually take a policy loan and use your cash value to pay the minimum amount, and that's only good if it's going to be a one or a two year type of thing. If you know you're done putting money in, either out of necessity or life circumstances just change, then we want to work with companies that will allow you to close your policy to where no minimum amount is ever required again. So either having the flexibility in the short-term to keep your policy open and active by using your cash to pay the minimum, or having the ability to close your policy, it's called the reduced paid-up contract, meaning the insurance company will reduce your death benefit down to the amount of life insurance that you've officially bought up to that point, and everything that you have in terms of the cash and the growth and all of that is locked in and that will never change, but your contract's paid-up and no more minimum amount is ever required.

Peter King: Okay. I know there's probably a million more questions that we have around this, and at the end of this call we're going to point people to one of your websites where they can really start to better understand this and see some visuals and the video and everything, so we'll get to that in a minute. But I want to go back to this hypothetical scenario where we have somebody that has $10,000, they now know what type of policy to look for, they now know what type of advisor to look for and how they're making their money, so walk us through that next step. They've taken the money, they've invested it, or they've saved it, I guess, into the policy, and so now they have this life insurance policy that has ... Is the cash benefit the amount of money that you put into it or is that ... Right?

Ryan Lee: Good question. So when the policies are set up in the first year, you'll have about 75% to 80% of what you put in, so if you put in $10,000 you'll have about $7,500 of cash available, the other $2,500 is literally buying you life insurance. That's when I saw we want to reduce the cost as low as possible. In year two, if you put in another $10,000, something in the neighborhood of 80% to 85% of what you put in is available in cash. So you put in 10, $8500 of the 10 shows up in cash. But when the policies are structured the way I'm talking about by your third premium, your dollar for dollar. You put in 10, 100% of what you put in shows up in cash value and it remains that way for the rest of your life. So today I'm putting in money into the policy I set up 10 years ago, the second I put that money in it's immediately available in cash value plus the growth that I've earned and I can go in and start using it and using it for my financial plan.

Peter King: Okay. All right, so somebody's invested, let's say, the $10,000, they'll have proximally $7,500 that they could then borrow against their policy and get right back?

Ryan Lee: Bingo.

Peter King: Right. So a lot of the people that are probably listening to this call are real estate investor so a lot of people like this strategy from a real estate investment standpoint because they can borrow against their life insurance policy, they put it ... Let's take a step back, they put $10,000 into the policy, they're able to take out $7,500 relatively immediately, the $10,000 cash benefit still continues to accrue and compound, the $7,500 that they borrowed against they can now use towards an investment and then ... If you can walk us through, and maybe $10,000 is not enough, but if you can walk us through maybe a standard real estate investment and then what happens with the profits on that and how the tax is affected.

Ryan Lee: Can I walk you through this with a story?

Peter King: Yeah. That's actually even better.

Ryan Lee: Okay, and this is my story. This is how I got into it. So I'm going to give you a little bit about my back story and why and how I'm doing what I'm doing today. I started just like most people, I actually grew up as an entrepreneure, if you can believe I actually had a paper route, I don't think those really exist anymore today, but from a paper route [crosstalk 00:34:06].

Peter King: How is that possible? You don't look that old.

Ryan Lee: Yeah, I know. I'm the same age as you, I would imagine. But paper routes back in the day, on my [inaudible 00:34:16] bike, cruising around my neighborhood, tossing papers around. I've always been an entrepreneure, I've always been a hustler and ... It's interesting when I was in college, because I knew I had to go to college because my dad presets me from the time I was little to the time I should've been in college, and when I was in college I actually had a side hustle where I had a lawn aerating business and I would take other high school kids out and we'd knock knit doors and we'd aerate people's lawns. I made more money on the weekends, the crazy part about it, I made more money in a weekend than I did in my first full-time job after I had a college degree. But I knew I had to follow the safe and secure route of getting a job, putting my money in a 401(k) and doing the sensible thing.
Here's how it all started for me, man, when I was in college there was an individual who was in my college class, in my graduating class, and I thought he was crazy, he was buying real estate in college, and I didn't know it at the time how much he was buying but he was buying real estate, and I thought for sure I'm going to see this guy on the breadline because he was the only guy when we graduated that did not have a job to go off and use their degree. I had a job, I ended up moving from California and then to Texas and all over the country.
My thing was when I first got out and I was working the corporate job, I felt so disconnected. I've always been a good saver so I put my money in the 401(k) and I got my magical company match and all of that and I thought I was on track and maybe I could retire early if I saved more money, but 2008 totally woke me up and it woke me up to two principles, number one, I had zero control over what I was doing, zero, which meant I had no way to influence the outcome. Number two, I was still pretty young. I had only been in the corporate world for about five years when 2008 happened, but I'll never forget it, man. I sat around with my coworkers, people who were in their 50s, and those guys were devastated. I mean, their entire hopes and dreams shattered within a matter of months right before their eyes. I remember looking at those guys, thinking to myself, "Man, I'm doing the same thing they're doing and I don't like the life I'm living. Every promotion I take I move to a new state and I lose a little bit more of my soul," is what I felt like, "but I'm doing the same thing they're doing. How on earth am I ever going to get better or different results than they're doing?"
So I went on this quest and I traveled a ton at the time, I traveled about 90% of my time at the corporate job I was working and I started using those plane rides as my education, and I started reading a bunch of books. Every book I read seemed to be the same strategy, a different mutual fund strategy, a different asset allocation model, a way to do auctions, it seemed to be all of the same strategies, and I tried a bunch of them but I never felt like I had any control.
I came home for Christmas and I was lamenting, I was sad and I ran into this old college friend, and I could tell immediately when I ran into him he was in a different financial hemisphere than I was. Different. He didn't try to brag or rub it in, but I asked him, I said, "Chris, you've got to tell me what you're doing," and he invited me to come to his office. I took my wife, we drove to his office and he sat down and he actually explained this concept, "I'm putting my money in life insurance and I'm buying real estate. I'm doing it over and over and over again. Since we last met in college I went from 12 properties in college to now well over 100, just five years later." Self-made millionaire doing it through life insurance and buying real estate. My jaw literally dropped to the ground and he told me that he would actually teach me his strategy if I paid him $5,000.
Now, here's the thing, I had never made that type of investment in myself. I guess you can consider college an investment in myself, but I never made that type of investment. At that $5,000 was almost all I had to offer, or all I had to give. We wrote the check and I'll never forget it, we were driving home, back to my parents house, in our borrowed Toyota RAV4, and there was this awkward silence between my wife and I, and I thought she was pissed. She gave me the thumbs up and said we could do it because she knew I was dying inside of my corporate job, and she said ... We were driving down the road, awkward silence, and then we just turned to each other after moments and we just started laughing. We didn't know what we had done at that moment but we took a bet on ourselves, and I'll tell you what, that bet has paid off in spades because from that point to today I have funded life insurance and used life insurance to buy investment real estates.
My financial plan went from being complex, what should my next stock strategy be, how should I do asset allocation, how do I do puts and calls, to simple, put my money in life insurance, I take a policy loan, I buy cash flowing real estates, I use the cash flow to pay back the policy loan and I push the repeat button. I do it over and over and over and over again.

Peter King: Fascinating. Fascinating. Man, this to me is such a powerful answer for the person who's looking to create wealth for themselves and financial freedom, but as in your case, and I know so many other people that are just dying at work and they're renting their life away to somebody else that's enjoying their lives, so I loved the strategy.
This is a total tangent, but I'm curious, what led you and your wife to be able to deal with ... Let me take a step back, one thing that I've recognized in entrepreneurs is their ability to on one level, either tolerate or be comfortable with not knowing, be comfortable with uncomfortableness. What was it about you and your wife that, from a mindset standpoint, allowed you to make that investment in yourself when at the time that seemed like it was way too much money?

Ryan Lee: Knowing that no one's going to care more about my future and my life than me, and if I'm not going to take responsibility for it then I deserve every bit of the life that is given to me. If I'm willing to show up at a job, cross my fingers, hope that it works out, hope that I get the next promotion and just live a life based off of hope, that I'm not actively, intentionally creating a life that I want. Man, now in the position that I'm where ... At the end of the day I sell life insurance to people, and I've actually had two of my clients die, and I'll tel you what man, there's nothing that gives you more perspective than realizing how fragile our lives are. We all think we're invincible, it's not going to happen to us, we're going to live until we're 150, but we never know.
For me and for my wife, it came down to I'm not going to live a differed lifestyle anymore. I'm not going to wait and hope that one day I have enough and one day it all works out and one day, magically, I get to live the good life, I'm going to create it now. As uncomfortable as it is, as hard as it is, I would rather live my life on my own terms than someone else's.

Peter King: You just changed somebody's life. Whoever's listening to this right now ... That's powerful. I tip my cap to you on that because it's something that's in my heart as well. I get fired up thinking about it.
Walk us through a little bit how ... You talked about that you have some clients that have passed on, that have leveraged the strategy, and/or maybe talk about your own personal experience, what does that look like for you? What does a life living on your own terms look like so somebody can get a tangible idea as to what it at least means for you?

Ryan Lee: Well, here's the thing, man, in the beginning I talked to you about what is true wealth, and often times we confuse money as wealth, money is a tool that can create a wealthy lifestyle, but money in and of itself is not wealth. It's just a piece of paper. It's a bargaining chip that we're able to use to say, "hey, Peter, I'll give you this piece of paper in exchange for your goods and services." That's all it is. It's a way to make transacting easier.
What true wealth really is for me, it's about having time freedom. I don't believe in the sense of time freedom ... In the beginning when I first started this I thought I would be the guy that sits on a beach sipping a piña colada because I had a bunch of real estate and a bunch of cash flow. At the core, that's how financial freedom is sold, but what I believe, man, is every single one of us, we have a unique god-given purpose here on this earth, and that purpose, when we focus on it and when we solve it, it provides value to other people. I could never do what you do, Peter. Your purpose is yours, my purpose is mine, and when we align we can exchange and have a mutually beneficial exchange because you're bringing your skill sets, your mind sets, your unique god-given purpose to me, and that's valuable to me.
So what I'm saying here with all of this is financial freedom is nothing more than having time freedom can actually choose to use your time to build a life that you love, and part of that life is living your life on purpose. I believe living your life on purpose for everyone should just be solving problems, whether you do that in a business form, you do that by giving service, you do that with your family, you do that with your children, it's about having control over how you invest and utilize your time.
For me in the beginning, even when I got going in real estate, I didn't understand it. My wife and I joke when we lived in our first house we had started this concept, and I went crazy, and this is not a good crazy, once I saw that I had a path to getting out of the corporate world I put every penny, and I'm not kidding, every penny into these policies and into real estate. It was funny, we lived in a house for three years, and when you knock on our front door, we would open up the front door and you would walk into an empty room and then you can walk into our kitchen and we had a couch that came with the house and a table that was given to my parents for a graduate present and every room had a bed in it.
My wife, we joke about it because I remember we had this conversation, it was a heated battle because she wanted to buy a picture and decorate our house and turn our house into a home, and I said no. "Why would we do that? When I have this cash flow, when we have this, then we'll live our life." I was still missing the point. It wasn't until a personal health related incident with my oldest son slapped right in the face that I realized I was missing everything just because I had a different financial plan. I didn't get the concept of true wealth. I'll never forget that. It taught me the value of living my life, not tomorrow, not when I'm 65, but today.

Peter King: Powerful. There's a famous saying that says "The ultimate failure is success without fulfillment," and-

Ryan Lee: Tony Robbins.

Peter King: Tony Robbins, yeah. So many people, especially that alpha energy that just gets out there and wants to dominate and rule the world, is so hungry after success and often times achieve it, and then they're empty inside and there's nobody to share it with. I love that.
We were talking before we started recording this, I know we're getting close on time here, but you mentioned a family crest, would you mind sharing what that means and what you're doing with that?

Ryan Lee: Yeah. I could actually go open the [inaudible 00:45:20]. I just got the box today, I haven't opened it yet, but I know we're doing a podcast, but here's the thing, man. So when this happened with my son, my son ended up having to have an open heart surgery, and it totally shifted my perspective, totally shifted my perspective, so we use our policies in one of two ways now, we use our policies to buy time through cash flow and real estates, or we actually use our policies to create lifestyle. So we have a system and a strategy, we have a policy uniquely set up, we call it the fun policy, and it is only used to create lifestyle experiences with our family. We've used it to [inaudible 00:45:57]. Right now we're actually using it ... Over the last six months we had a little challenge, my wife and I, we live a challenge-based lifestyle, and so we're always setting little goals within our family, and they're short-term goals, and it pushes us to kind of always live life intentionally.
So the last challenge that we lived, that we set for ourselves, is we wanted to create a framework within our family of what it means to be a Lee, what we stand for as individuals. So over the summer, we took our kids on a bunch of hikes and we talked about words, what does it mean to be a Lee to you, Kiana, to you Doug, and to you Desmond, those are my kid's names-

Peter King: You're saying it kind of quickly, Lee is your last name, so what does it mean to be a Lee family member?

Ryan Lee: Lee.

Peter King: Got it. Okay.

Ryan Lee: Yeah. We came up with four things, to be a Lee, our four most prized attributes are faith, kindness, strength and fun. So we created a crest, a family crest, that has pictures that symbolize those words and we put them on shirts, and our kids helped us. We designed it, we went to 99 Designs, and we paid some people to design us a crest, a family crest, we drew up ... It's sitting right here on my desk. So this is our first shot at it, we drew our own version of it right here, and then we had it turned into an actual crest, and then they were put in shirts and we're taking our kids, they don't know that it's an actual cruise, but we're taking our kids on a celebration to celebrate what we've created as a family, and this will now serve as a framework.
It's been really fun, man, because the last couple of weeks we've had some parenting moments within our family, and my daughter, she actually said, "Well, the Lee's stand for kindness. That's not how we act, that's not how we treat each other, the Lee's stand for kindness." Man, I didn't have to say that, my daughter said it, she's nine. I don't know, it's just a way for us to really try to instill values in our children that we all believe in and we can live our lives by a code.

Peter King: That's fantastic. I love it. I'm totally doing that. I started that actually a little while ago, and it's inspired me to revisit that.
Well, Ryan, we are just about out of time, but let me just do a quick recap, going back to the nuts and bolts here for a second, make sure that we didn't miss anything. So let's say you have $10,000, you're investing it in a whole life policy, you gave us some tips on what type of policy to look for, you recommended that we do that through an advisor, do you have to use an advisor or is that just best practice?

Ryan Lee: Yeah. Honestly, you have to ... Insurance companies right now will only set these policies up with licensed advisors that can set up these type of policies.

Peter King: Okay. Good to know. So we know the right type of policy, you have to find a licensed advisor, you're then investing that into the policy, and then we could potentially do another call with some of your cohorts, Jimmy and Bob, about how to take that money and invest it in real estate to create those cash flowing opportunities.
I love what you said about having two types of policies, one that buys time and one that buys the lifestyle. That's brilliant to me. Yeah, I think that covers at least the Infinite Banking side of the equation. Is there anything that we missed? Any other things that you need to add?

Ryan Lee: Just going back to the name Infinite Banking, once you understand ... I mean, we talked about it, but once you understand how to use these policies like a bank, quite literally the possibilities are infinite.
Anyone listening to this, I want you to imagine what your life would look like, feel like and be like, if for the first time perhaps you had control over your financial plan, you had a tool that would keep you on track for your long-term goals, that you can leverage the value of that money today to create a lifestyle that mattered to you today. It changes the whole game. It changes the whole dynamic. Now I don't care what happens in the stock market. I really honestly don't. I don't care who sits in the oval office now, for political reasons I do, but for my money it doesn't matter. I've shielded and protected my money from taxes forever more, and that's the benefit of this, we put you in the driver's seat, you're now in a position of control. Imagine what your life would look like if you had control over your financial plan, what could you create? What kind of purpose could you live? What kind of human life, potentially, could you fulfill?

Peter King: That's a total game changer in my mind. You did mention the tax situation and I wanted to follow up with you on that, if somebody uses the money to buy, let's say real estate, and it's cash flowing a net $1,000 a month, what does the taxes look like on that? Does that got to you? Does it go to the policy? How does that get set up?

Ryan Lee: Good question. So think of it this way, no matter what you do with the cash once it comes out of your policy, essentially, once you take a policy loan and use it for something else whether it's real estate or a vacation, we have to deal with the tax consequences of that investment, of that decision. So in real estate, if you have $1,000 net positive cash flow I would encourage you to have a tax plan around that $1,000 to minimize the tax liability of that as much as possible, and you can absolutely do that with real estate. Once you've then got that money, you pay taxes on it, then you put it back in your policy and from that point forward, once you've secured it in your policy, it grows tax-free from the point forward.

Peter King: Okay, okay. Got it. That's a good delineation between the policy itself and the investments that you're putting it in. Awesome. Okay. Thank you for that.
One final tip, where should somebody go if they would like more information about what you are up and/or to get educated more on all of this?

Ryan Lee: Yeah. We got a few different places to go, but we put up a landing page, no obligation, you don't have to opt in, you can actually go to the landing page, and I think we out four or five videos on it, so cashflowtactics.com. There's four or five videos on there that will show you exactly how these policies work, how you can use them for real estate and then only if you want to, there's an opportunity for you to connect with us to see if we can help you out.

Peter King: Fantastic. I'm going to say one more time because you were cutting out a little bit and I want to make sure it's clear, it's cashflowtactics.com. All one word.
Ryan, thank you so much, man. I really appreciate the knowledge that you were dropping on this call, but also just the example that you're setting and the life that you're creating with your family. It's very inspirational. So thank you, man. Maybe we could have another call and pick it up from where we left off.

Ryan Lee: Peter, would love it, man. It's such an honor to be here. I love what you're doing and the message that you're spreading, such a needed message in today's world.

Peter King: Fantastic, brother. I appreciate it. Thanks again.